Perikal Chick Munisamappa Mallappa vs. Commissioner Of Central Tax
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner seeks for the following reliefs: "a) Issue a writ of Certiorari or direction in the nature of a writ or certiorari quashing the order-in-appeal no.22/2023-24 GST (Commr.) A-II dated 25.10.2023 passed by the Respondent No.1 under section 107(11) of the Central Goods and Services Tax Act, 2017 herein marked as Annexure-A. b) Issue a writ of Certiorari or direction in the nature of a writ or certiorari quashing the order-in-original no.26/GST/2022-23 dated 13.03.2023 passed by the Respondent No.2 under section 74(9) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods & Services Tax, 2017 bearing DIN No.20230357YW000051565E passed by the Respondent No.1 herein marked as Annexure - B. c) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity." HC-KAR NC: 2025:KHC:40461
Heard learned Senior Counsel for the petitioner and learned counsel for the respondents and perused the material on record.
In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned Senior Counsel for the petitioner submitted that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner despite having issued reply to the show cause notice dated 25.01.2022 issued under Section 74(1) of the CGST Act. The relevant documents in support of the claim of the petitioner were not produced by the petitioner which resulted in the respondent No.2 passing the impugned order in original dated 13.03.2023 which was upheld and the appeal filed by the petitioner before the First Appellate Authority, Respondent No.1 was dismissed on the ground that the mandatory pre-deposit of 10% of Rs.1,89,21,471/- had not been deposited/paid by the petitioner.
In this context, my attention is invited to the communication dated 19.07.2023 issued by the petitioner to the respondent No.1 in order to point out that the petitioner had already intimated the First Appellate Authority about Rs.4,34,63,204/- HC-KAR NC: 2025:KHC:40461 having been appropriated by the respondent No.2- authority and as such, there was no requirement of making the mandatory pre-deposit for the purpose of filing the appeal and failure to appreciate this has resulted in erroneous conclusion and the impugned orders deserve to be set aside and the matter be remitted back to the respondent No.2 for reconsideration afresh by providing one more opportunity in favour of the petitioner.
The Learned Senior Counsel would also point out the various errors in the impugned orders as hereunder:
"
The petitioner submits that the order-in- original passed by the Respondent No.2 has several glaring errors, which is contrary to the material available on record, which has resulted in this huge GST liability and penalty thereon. The same are elaborated above and at the cost of repetition, are summarized below
a) The computation of additional GST liability for the period July 2017 to March 2018, the Respondent No.2 has included the sales for the period April 2017 to June 2017, which periods are prior to the advent of the GST law and levy of GST on sales for the period April 2017 to June 2017 is without juri iction.
b) The computation of additional GST liability for the period April 2019 to December 2019, the Respondent No.2 HC-KAR NC: 2025:KHC:40461 has adopted sales of Rs. 17,61,67,566/- which is in fact inclusive of the IGST, CGST and SGST collected by the petitioner. Further, the actual sales inclusive of GST for the said period is Rs. 17,06,26,489/-.
c) The Respondent No.2 has computed additional GST liability by applying GST rate of 28% for the entire period i.e., July 2017 to August 2020, whereas, the 28% rate was applicable to the petitioner only for the period July 2017 to 15.11.2017 and thereafter only 18% rate was applicable.
d) The Respondent No.2 has failed to give credit of input credit and taxes paid by the petitioner for the period January 2020 to August 2020 of Rs. 1,36,69,112/-.
e) The Respondent No.2 has erred in denying input tax credit of Rs. 8,07,22,134/- though the details of the same were available in the GSTR-2As.
f) The Respondent No.2 has given credit of input taxes paid along with other taxes of a sum of Rs. 10,76,10,501/- but has denied the input tax credit forming part of the same while denying input tax credit of Rs.8,07,22,134/-." HC-KAR NC: 2025:KHC:40461
Per contra, learned counsel for the respondents would support the impugned orders and submit that there is no merit in the petition and the same is liable to be dismissed.
A perusal of the impugned Order-in-Original passed by the respondent No.2 will indicate that the respondent No.2 has taken into account that the claim of the appellant had not been substantiated by furnishing any records as can be seen from para 5(f) of the impugned order and has proceeded to confirm the demand made in the show cause notice against the petitioner; so also though notices were given to the petitioner to appear for personal hearing, the accountant of the petitioner appeared and took time without producing any documents.
Under these circumstances, in the light of the specific assertion on the part of the petitioner that its inability and omission to file reply to the notices and contest the proceedings by producing documents was due to bona fide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt justice oriented approach and in order to provide one more opportunity to the petitioner, set aside the impugned order-in- original and remit the matter back to respondent No.2 for HC-KAR NC: 2025:KHC:40461 reconsideration afresh in accordance with law. Insofar as the impugned order at Annexure - A passed by the First Appellate Authority dismissing the appeal filed by the petitioner on the ground that the mandatory pre-deposit had not been made is concerned, the respondent No.1 failed to consider and appreciate the communication dated 19.07.2023 addressed by the petitioner to the respondent No.1 wherein he has clearly stated that the sum of Rs.4,34,63,204/- which was appropriated in the order in original is to be reckoned /construed /treated for the purpose of the mandatory pre-deposit and failure to consider this also has resulted in erroneous conclusion and as such, the impugned order at Annexure A, also deserves to be set aside.
In the result, I pass the following: ORDER
i) The petition is hereby allowed. ii) The impugned order-in-appeal dated 25.10.2023 at Annexure-A and order in original dated 13.03.2023 at Annexure - B passed by respondent No.1 are hereby set aside. HC-KAR NC: 2025:KHC:40461 iii) The matter is remitted back to the respondent No.1 for reconsideration afresh in accordance with law from the stage of petitioner submitting its reply to the notice dated 25.01.2022 issued under Section 74(1) of the CGST/KGST Act, 2017. (iv) The petitioner is directed to appear before the respondent No.1 on 24.11.2025 without awaiting further notice from the respondent No.1. iv) Liberty is reserved in favour of the petitioner to submit replies, pleadings, documents etc., which shall be considered by the respondent No.1 who shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law.
(vi) In the event, the Petitioner does not appear before the respondent No.1 on 24.11.2025 as stated supra, present order shall stand automatically recalled without further orders. HC-KAR NC: 2025:KHC:40461 vii) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. (S.R.KRISHNA KUMAR) JUDGE
MDS List No.: 2 Sl No.: 58
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.